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Paper coupons fading

By The (Raleigh) News & Observer
Saturday, March 23, 2013, 9:00 p.m.
 

The number of coupons used by Americans to stock their pantries plummeted in 2012 — down 17 percent.

After surging during the Great Recession, the old-fashioned savings tool seems to have lost favor among consumers. Or has it?

Coupon industry insiders disagree on whether the drop is an aberration caused by a poor mix of coupon offers in 2012 or whether it signals the beginning of the end of the paper coupon era.

“There's a lot of discussion within the industry,” said John Morgan, executive director of the Association of Coupon Professionals, the coupon industry's trade organization.

“The industry is not used to having double-digit (swings) either way,” Morgan said. “That's a big deal. Historically, it has been slow single-digit (increases or decreases) either way.”

With an uneven economic recovery as the backdrop, coupon-clipping shoppers have taken notice.

Kim Maney, 38, of Apex, N.C., shops at multiple supermarkets and drugstores, follows coupon blogs and takes advantage of double- and triple-coupon offers to stock her pantry. A lawyer, wife and mother of a 2-year-old, Maney said she has noticed a drop in the quality of paper coupons.

“A quarter off toilet paper? Really? What am I going to do with that?” said Maney, who admits to being “horrified by the idea I'd have to give somebody full price for something.”

Last year, U.S. consumers redeemed 2.9 billion coupons on consumer packaged goods, which includes everything from cereal to toilet bowl cleaner. That's according to the most recent tally by NCH Marketing, a Deerfield, Ill.-based company and one of the country's major coupon clearinghouses. NCH is a division of Valassis, which publishes the Red Plum coupon inserts for newspapers.

The 17.1 percent drop in 2012 is even more dramatic considering the total number of coupons made available — paper and digital — remained steady at 305 billion.

Charlie Brown, vice president of marketing at NCH, attributes the decline to a calculated move by manufacturers to correct an “unusually high” redemption rate in 2011.

Coupon redemption reached 3.5 billion coupons redeemed in 2011, a 6 percent increase over the previous year and a 26 percent increase since before the recession.

During the worst of the economic downturn, Morgan said, “marketers ramped up (coupon offers) to protect their market share.”

In 2012, manufacturers put the brakes on coupons. The coupon values became skimpier, the expiration dates shorter, and oftentimes the coupons required that shoppers buy two or even three of an item before getting 55 cents off.

Manufacturers also issued more coupons for new products, which Brown said, “doesn't have the same level of appeal.”

“For the manufacturer, the redemption of the coupon is an expense,” he said, so they purposely made the coupon offers less attractive. “They don't want 100 percent of the coupons redeemed.”

Coupon shoppers Veronica Shores, 48, of Raleigh, N.C., and Michelle Morton, 42, of North Raleigh, have also noticed the decline in coupon quality and adjusted their shopping habits to compensate.

Shores is on a fixed income and has relied on coupons to help make ends meet. She attends local coupons swaps, where she meets with other coupon clippers thumbing through stacks of everyone's cast-off coupons looking for the ones their families will use.

“They have really started dropping the coupon values,” she said at a recent monthly swap held at Wake County's Southeast Regional Library in Garner, N.C. “It makes it harder to save.” To supplement her coupon savings, she's also using more store brands.

In contrast, Morton has cut back on her coupon use. Raising three kids, she started wondering if her time clipping and organizing all those little slips of paper was time well spent.

She now does a lot of her shopping at the no-frills grocery chain, Aldi, where most of the products are store-brand and coupons aren't accepted. She hits Harris Teeter for the best of the coupon deals.

Citing the competitive nature of their business, manufacturers wouldn't discuss their coupon offerings. Jeff LeRoy, a representative for Procter & Gamble, declined to comment. “We consider coupon redemption information proprietary,” he said in an emailed statement.

Likewise, grocery chains don't like to comment on coupon redemption. Harris Teeter would not comment beyond saying its coupon programs are popular.

Heather George, vice president of brand strategy at Lowes Foods, acknowledged a dip in redemption but not as severe as the reported nationwide decline. She said Lowes Foods numbers were better because of its policy of offering every-day double coupons and occasional special coupon events.

Phil Lempert, a consumer analyst known as the Supermarket Guru, said he thinks the discussion about coupon expiration dates and lower coupon values, while valid, misses the point.

He argues that paper coupons, in particular, are an outmoded way of delivering deals to consumers, pointing out that only about 1 percent of all coupons are redeemed - even in a good year.

A contributing editor to Supermarket News, Lempert is the keynote speaker at the Association of Coupon Professionals annual meeting in New Orleans next month. He forecasts continuing drops in paper coupon redemption.

Lempert plans to be blunt in his keynote speech. “When you drop 17 percent in one year, you're like the Titanic,” Lempert said. “You better get the lifeboats out or be ready to go down.”

 

 
 


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